FTC declines to fine companies who sold 10000s of laptops with spyware preinstalled

Earlier today, we noted an FTC settlement which shows that seven rent-to-own business sold PCs with installed spyware that secretly collect consumer information. The software is designed by a possibly-defunct company called DesignerWare, and the FTC estimates that over 420,000 computers had included a utility called “Rental Agent,” which included a feature called “Detective Mode,” which not only included a keylogger but the ability to access the computer’s webcam. Creepy. This is one of the biggest corporate invasions of privacy in recent memory and the FTC report issues no fines and finds no criminal culpability.

What kind of data did the rental companies access? From the FTC report:

Data gathered by DesignerWare and provided to rent-to-own stores using Detective Mode revealed private and confidential details about computer users, such as user names and passwords for email accounts, social media websites, and financial institutions; Social Security numbers; medical records; private emails to doctors; bank and credit card statements; and webcam pictures of children, partially undressed individuals, and intimate activities at home, according to the FTC.

Oof. Basically, the software allowed people you’ve never met to see anything that was on your computer screen, a whole lot of passwords, credit card numbers, private messages and Social Security numbers. And if that wasn’t bad enough, the software included a faux registration screen that simply collected consumer data. Ostensibly, the reason this software was installed in the first place was to provide a “kill switch” in case a renter couldn’t make the payments, but it actually just ended up being a conspiracy to collect this generation’s gold: data.

The offending parties have gotten off easy, at least compared to what you would expect from a scandal of this proportion: the businesses have to cease monitoring customers (of course), provide records to the FTC proving they haven’t done so (fine), and they’re prohibited from using the improperly-collected data (which they already were, in a way.) Again, there’s no fine, and no criminal charges. If you’re upset about this, the FTC is accepting public comment here.

Sure, the ability to buy a PC on cheap monthly installments can be attractive to some, but I’d recommend staying far, far away from rental PCs in the future, even after the toothless FTC settlement. There are laptops are your local retail store that cost less than a few months of a rental service, that have crapware but not spyware installed, and can do general computing tasks just fine. Sure, they might not be the newest models, but at least you won’t have to put tape over your webcam.